Stick a fork in the soft-data decoupling.
Moments after PMI reported the worst Service PMI since September, the Non-manufacturing ISM also missed, with the headline number dropping from 57.6 to 55.2, the lowest since October, or before the Trump election.
Global stocks were pressured by a poor start to the second quarter in the US, where carmakers reported disappointing sales data, slamming auto stocks around the globe. The selling has persisted for a second day, with Asian stocks and European shares all partially in the red today after their biggest decline in two weeks. Car sector is biggest mover in Europe, offsetting gains in financial services and media.
With the S&P having traded as high as 2,400 last month, which is also JPM's year end price target, and having dipped a modest 3% since then peak to trought, some traders were worried if this is finally the start of the inevitable correction that has evaded stocks for so long. Not according to JPM, though. Recall that several weeks ago, JPM's Marko Kolanovic called for an imminent bounce in volatility following the March quad-witching.
After a stellar quarter for US equities, stocks have unexpectedly slumped on the first day of Q2 despite "whispers" of pent upmutual fund reallocation into risk assets that would take place today.
After the best quarter for US stocks since 2015, global equities have started off Q2 on the right foot, despite caution about the upcoming meeting between President Trump and China's Xi Jinping later this week, and Fed Minutes which are expected to be more hawkish than the FOMC statement.